Wednesday, January 16, 2008

Goldwater Institute: There are other ways to address school capital costs besides financing

Capital Comparison

By Matthew Ladner, Ph.D.

When considering whether or not to finance capital costs for schools, or utilize other methods to reduce pressure on Arizona's beleaguered budget, a comparison between Arizona and Nevada is instructive.

Nevada faces runaway enrollment growth similar to that of Arizona. Between 1995 and 2005, Arizona's K-12 student population expanded by approximately 351,000 students. During the same period, Nevada's K-12 population increased by just over 147,000 students. As a percentage of the total student population, these increases were comparable. Projected growth extends as far as the eye can see for both states.

Data from the National Center for Education statistics shows that Nevadans spent almost twice as much per student on capital costs as Arizonans in 2003. Higher capital costs ultimately mean less in the way of resources for classroom instruction.

Arizona's ability to keep capital costs below the national average while facing significant growth can be attributed in large part to our embrace of parental choice in education. Charter schools alone have absorbed approximately a third of the increase in the public school population since 1994. Arizona's charter schools do not receive state facility funding.

Additionally, under Arizona's open-enrollment policy public schools with empty seats have an incentive to make those seats available. Some demographically aging areas with high quality public schools have large numbers of transfer students. In the absence of open enrollment, these schools might be underutilized.

Nevada has little parental choice and is almost the ultimate in "consolidated" county-wide school districts. Clearly this hasn't resulted in savings to the taxpayer. Ironically, some would have Arizona emulate Nevada, rather than the other way around.

Dr. Matthew Ladner is vice president of research at the Goldwater Institute.

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